My Commission is my Livelyhood

I would like to just open some eyes a bit as to what Real Estate Agents actually do for the money they earn. People think that being in Real Estate you make money hand over fist. And at the end of a deal you do get a nice paycheck. But where does that money actually go. 

1. When you work for a brokerage you have to split that commission with the brokerage. Sometimes that split is 70/30 or 80/20. So right off the bat 20% of your paycheck goes to your brokerage where you hang your hat.
2. Then you have to pay Error and Omission Insurance. Average is $30.00 PER DEAL.
3. Then if you are responsible you take out 28% for Taxes and set that aside to pay Uncle Sam.
4. Then if you work for a large national brokerage they usually have MONTHLY FEES, DESK FEES, COPY FEES, and those can be varied. So lets say $100 per month. (NOT PER DEAL PER MONTH)
5. Then all the Gas and Wear and Tear on your personal vehicle, reimburse yourself for that. 
6. Then National Association of Realtor Dues, MLS Dues, CE Classes (Average $120 a month)
7. Then your marketing that you want to do, so you can get a future listing or buyer. ($300.00)

The average commission for a Realtor on the Buyer's side is about $7500.00. 

7500.00
-2550.00 Brokerage
-30.00  E&O Insurance
-2100.00 for taxes
-200.00 Monthly Dues for Having a Desk and being affiliated with big name brokerage
-250.00 Gas Money and wear and tear
-240.00 Dues / Licencing / CE Classes

What is left at the End of the Day $1830.00

Most Realtors give their clients a Thank you / Housewarming Gift of some amount. No more than $100.00

Then if any other agents helped them with the deal it is customary to give them 30% up front so by the time is all said and done, you probably walk away with $500 in your pocket. 

Then if you are a Realtor like me you Discount the Listing Side. I make $1477.50 AFTER the house sells. And there is still expenses after that.

Do not Discount My Livelyhood and what I do.

1. I am assuming all the RISK when I take on your house as a listing.
2. I do not have Paid Time Off (PTO) or Sick Days. If I do not work, I won't get paid. 
3. My time management is key. When you are working with Several Buyers and Sellers you will be lucky if you get any sleep. 
4. Vacation? HA! If I do not have my lap top with me on Vacation I am out of business. I actually wrote up a contract early in the morning on a long awaited Vacation for Buyers and submitted it. I book my Hotels on the Wifi Connection and feedback of the same because I need to be able to communicate with my clients when I am trying to get some Rest and Relaxation.
5. My Employer is me, my perks and benefits are supplied by me.  Sure I get to have lunch with my Power team once in a while, and go to social functions but what I really want is Life Insurance/ Paid Vacation/ Paid time off/ Flex Spending and a 401K with a Match. But this is the profession I chose to do because I love it. And I have to pay for those things too.

But when people discount what Realtors do they really do not know all we go through, and deal with on a daily basis. We can spend weeks with a client or years with a client.  We run the risk of losing that client to another agent because of someone we trusted helping a buddy of theirs. Thus taking that paycheck away from me. Yes this happens.  But when an agent has a buyer they have spent time getting that buyer ready, learning their wants and needs, hunting for the home, putting in offer after offer and helping them deal with the rejection. It is fun to be a cheerleader for first time home buyers and experienced home buyers. But it is exhausting and rewarding at the same time. 

I love what I do, but I am not the uber successful agents on HGTV with my own show. I am just a woman who loves to teach and guide people through the process, look out for them, protect them and given the opportunity represent them to the best of my ability and get them top dollar for their home or find them the home of their dreams in their price range. 

IT IS WORTH IT, but do not Discount what I do. And my Goal for 2015 is the same as 2014.

HOA LIVING PART 5of 5 IT IS NOT AN APARTMENT COMPLEX

I know it has been a while since I last blogged about HOA Living but I have been very busy with Real Estate, selling and helping buyers.

During the last year I have learned one thing. There are a lot of Real Estate Agents who are not properly letting their buyers know what the HOA means. I have encountered this a lot as of late being the President of my HOA. The new owners think that the HOA is responsible to maintain the outside of their home. This would be the case if you lived in a Condo. But in a Town-home PUD the owner is responsible for the maintenance of the unit. Roof, Siding, Doors, Windows, Paint Trim everything is your sole responsibility to take care of.

As a buyer you have that period of time to make the decision to move into a Community that has an HOA. During that time your agent needs to get from the SELLERS AGENT a copy of the Rules and Regulations, CC&R's, RULES AND BYLAWS, BUDGET, and anything else that you may want to review. Should you not get this from your Real Estate Agent they are doing you a HUGE Dis-Service.  Before you purchase a home you should know all that comes along with it.

Homeowners Associations run the entire community, not each and every individual unit.  Each unit is separately owned and operated by its Owner.  The HOA is the one that makes sure the rules of the community are kept, the maintenance of the units is in line with the community rules and standards. The HOA also has to maintain the common grounds of the community and provide the benefits that are supplied by that community, (Garbage, Grounds Keeping, any Utilities and so on.) They cannot make changes to these items with out a status quo or community vote.

It is a challenge for most new homeowners to go from Apartment/Rental Living to owning because there is a lot more responsibility and there is no land lord to fix things. If your dishwasher or hot water heater dies, guess what, you as an owner get to fix it.  When a lightbulb burns out... you have to replace it.

So I urge all homeowners and future homeowners to do your homework and really understand what you are getting into before you sign those papers.  (What Show is this house from?)

NOW A MEDIA ONE REAL ESTATE AGENT

So I have moved my Real Estate Business over to MEDIA ONE REAL ESTATE. Because my business is not to make me a ton of money and rip off my home sellers and buyers. I like the idea of people keeping their hard earned money in their pocket. Not line mine.

HOA LIVING 4 of 5 What are some of the Benefits

What is the best thing about living in an Homeowners Association? 

Well you can ask 10 different people that question and get 10 different answers. 

Each HOA is different, but they all have one thing in common. Amenities and Benefits

Some communities have a pool, club house, workout room, tennis courts, playgrounds, extra parking, RV Parking and Storage, a Greenbelt, Cable TV and Internet, Utilities included the list can go on and on!

Why do I live in an HOA, several reasons. I hate doing yard work, I hate planting things and I do not have the time or the desire to take care of a yard. This is why I live in an HOA. Also I hate in the winter shoveling snow.  I hated doing it as a kid and it is even worse as an adult.  That is why I love living in an HOA. 

The benefits of having your time free to do what you really love to do is worth the small fee each month.  So this is why I encourage people to get to know the communities they are thinking of buying a home in. If there is an HOA find out all it has to offer. Talk to the neighbors, and current owners about the community. Find out all you can. 

My last post is going to be about getting involved in your communities.

HOA Living Part 3 of 5 ~ The Annual Meeting

Ok there are three way's this can go... depending on the HOA you live in.
1. You will have no one show up and nothing will get done. Because no one cares.
2. You will have everyone show up with Pitch Forks and Torches ready for battle. Because they only seem to care once a year.
3. You will have everyone show up listen attentively and put their heads together and make decisions on what needs to be done, vote, conduct business and everyone will leave happy because there is a plan in place. 

I have lived in all three of these kinds of communities.

Here is an example of what the Annual Meeting is supposed to be, and what is supposed to happen.


You go over the agenda. Usually it is Delinquency of Dues in the complex. Not saying who, but how much is past due. Then you go over the income and the budget. and discuss what needs to be done at the community to keep up the property values and address major concerns.  Then you go over the Balance Sheet of what the community has to address these expenses.

This is where you as an owner see the full disclosure of where your funds are going. You can help by seeing where cuts can be made or if there is a way to save money. 

Most complexes if there are major capital improvements that need to be done you may have to discuss the dreaded special assessment.  These are imperative however because if you want your community to be approved for FHA status you need to maintain your community so in the future you can sell your home to another first time home buyer.

Here are some examples. 
1. Parking Lots/ Roads and Sidewalks.  These have to be maintained.
2. Foundation work on Units and Roofing. You would not your house sinking, flooding or leaking would you?
3. Common Area maintenance. This includes club house, tennis courts, pools, fitness rooms, landscaping, sprinkler systems and so on. Yes even if you do not use them personally they are part of the common areas and you need to help maintain them. You live there.


Then you need to elect board members, people who will serve your community WITH OUT PAY to make decisions on what is important and what needs to be done.  You want people with the ability to serve and with some expertise in business, real estate, accounting, community service and so on. 
I encourage all my home buyers and owners in my community to serve one term. It is an eye opening experience and it is REWARDING.  That is why I do it in my communities that I have lived in. 

These meetings are not to come in and complain about what is not being done or who you have a problems with. Those issues and concerns should be addressed at the monthly meeting with the HOA Board members.  Annual meetings are to conduct business and set priorities. 

I hope you find this helpful. 

If you have questions or comments feel free to post.

Standards of Pratice ~~ Being an Accountable Business Professional

As you know I am a Real Estate Agent, and it is that time of year where I have a lot of people who want to house shop and want my time, experience and expertise.  However, I have a few standards of practice that I will be adhering too. 

1. Please Schedule an Appointment with me. So you have my full attention, please schedule time.
2. Before you get in my car or even go see a house, you will need to sign the Buyer Broker Agreement. Yes my time is that valuable. And if you refuse to sign this agreement, I am sorry but I will not be taking you to see properties.  By signing this agreement, you are protecting you, and me, and I am able to justify my expenses for time and travel to the IRS.
3. Communicate with me honestly what your wants and needs are. 
4. Be Realistic with your price point if you are looking at homes under $100K in the Salt Lake City Metro area most of those homes are going to need work to bring it up to the standards that most buyers are looking for. 

I am sorry if this seems a bit harsh, but as a professional I need to juggle my time with my clients and their needs. And if you do not hire me or sign that paper, do not call me for help, because I do not work for free.

What do my Fees Actually GET ME?

WHAT DO MY FEES GET ME?

I often hear from people who live in an HOA, our HOA fees are a RIP OFF, we do not get anything for what we are paying for. Well actually you do. I am going to go over a basic HOA budget and show you what you are actually paying for.  This is not the same for EVERY HOA but this is a good example of what you are getting and paying for.

What is it?    How Much
   
Management    $9.45
Bank Charges Licensing Property Taxes    $0.22
Postage/Printing/Coupon Books    $1.30
Landscaping Snow and Plowing and Sprinklers    $25.49
High Speed Internet and TV    $51.47
Insurance (Master Policy)    $16.11
Misc. Common Area Repairs & Maintenance    $2.92
GARBAGE PICK UP    $10.50
Irrigation Water - Electric Utilities    $6.16
Lights Fences Surveillance    $2.52
Legal Fees and Accounting    $2.45
CAPITAL RESERVE CONTRIBUTIONS   
Asphalt Streets    $6.08
Concrete HOA Sidewalks    $2.80
Fence Monuments Signs Maintenance    $1.82
Concrete Curbs    $2.52
Landscaping Common Trees    $2.80
Lawn Sprinklers    $0.39
TOTAL FEE    $145.00

Now as you can see that is quite a lot of items, for the fee.  Let’s explain what each item is line by line. 

Management, what do they do. Well the Property Manager fields all the calls, manages all the costs, gets all the vendors in and out to do the work required to maintain the property. They also do the accounting and collecting of the HOA dues. They also get all the paperwork for all the people who are moving in and out, and get everything ready for the Board Members monthly meetings. The Property Manager is also there to make sure things are done in accordance to the law and the CC&R's. 

Bank Charges Licensing Property Taxes. Your HOA has to be certified with the state as an active NON PROFIT Organization. And the Property Taxes for the common area's have to be paid by everyone who lives there.

Postage/Printing/Coupon Books This is for all the notices, letters, communication and yearly coupon book that you need to use to pay your HOA dues. 

Landscaping Snow Removal/ Plowing and Sprinklers systems. Well this does not come free, this is usually contracted out and managed and maintained by a landscaping company.  There are a lot of different companies out there. If you do not care for, or appreciate the job that is being done with your current provider, let your HOA Board know your concerns. They will review the contracts and do what they can to address the issues. 

High Speed Internet and TV This is the largest cost of this particular HOA, but they have Fiber Optic Internet Speeds basic 15 up and down, and Basic Cable over 200 channels and HD. Now you contact your local provider and see if they can get you a Rate for the same for under $52.00 with out a Bundle or a Contract. 

Insurance (Master Policy) This covers the entire structure of the house. The best way to explain this is to take the roof off the house and turn it upside-down and shake. Anything that FALLS out of the house is your responsibility as an owner to cover with your insurance. The Master Policy Covers everything else. 

Misc. Common Area Repairs & Maintenance: This covers the light bulbs, and lighting for safety, the painting of the parking-lot, the doggie station baggies and trash removal of puppy poopie. 

GARBAGE PICK UP: Instead of once a week in a subdivision and paying on average $200 a year, you get your garbage picked up three times a week and for a lot less. 

Irrigation Water - Electric Utilities to water the grass and keep the lights on at night. 

Lights Fences Surveillance  This pays for the security system and the power to run them, to maintain the cameras on the property. 

Legal Fees and Accounting: This is to pay for the collection of past due fees, sometimes people fall on hard times, or get into the mindset that they do not have to pay their HOA dues. Well these legal fees put liens on the properties that are delinquent, pay for the collection efforts and help the HOA not fall into financial failure due to this situation. 

(This does happen, people feel the Internet and TV services do not meet their needs so they get their own through another provider. Then because they are not using what part of that HOA fee covers they feel that they do not need to pay any of it. I am sorry to say, Nope Sorry, you cannot do that. You have to pay the HOA fee in full every month regardless of your choices because again you agreed to it when you signed the papers at the title company when you settled and closed on your purchase of your home in the HOA.)

CAPITAL RESERVE CONTRIBUTIONS    (Capital Reserve is required per STATE LAW) the HOA has to have funds in reserve to cover catastrophic events and repairs. If the HOA you are considering moving into does not BUDGET or have a Capital Reserve fund, find out why, and I advise my home buyers to stay away from that because that means future SPECIAL ASSESSMENTS. I will go into that in a later post)

Asphalt Streets   Private subdivision, is responsible for their own streets maintenance and repair. It is better to have this on budget because it is a reoccurring expense. 

Concrete HOA Sidewalks Utah Winters are BRUTAL and on sidewalks when people put SALT on the concrete well it eats away at the ground and it turns into Ugly Sidewalk. You have to maintain that and keep up on that. Ask your HOA Landscaping company to use Ice Melt with out SALT to preserve the sidewalks and keep the sidewalks lasting longer. 

Fence Monuments Signs Maintenance, traffic signs for the streets and the fencing outside and around the property. Yes it is sad truth but people back into fences and bust through them, vandals graffiti the fences. This is just the part of being a property owner, and being part of the HOA you all get to help pay for that to keep it looking good. 

Concrete Curbs keeping the paint on the curbing and the repairs done when they get crashed into. 

Landscaping Common Trees. Trees Die, they get crashed into, they get broken by kids playing on them. You have to trim them, and spray for bugs. This is what this category is for. 

Lawn Sprinklers  They BREAK all the time, people run over them with their bikes, the lawn mower hit's it just right. Just regular maintenance. 

So as you can see you DO get a lot for what you are paying for. And if your HOA budgets properly you will not have to deal with Special Assessments.

When your HOA does not budget or plan properly, then if something happens that needs repair then every owner would be given a Special Assessment to cover the costs and you would have to come up with that money in some cases less than a month and I do not know about you but I would not like the burden of coming up with $1000 or more in one month for someone's failure to plan ahead. 

In the next blog post, we will discuss how most HOA BOARD Meetings work, and what the Annual Meeting is supposed to be about. 

Thank you for reading and if you have any questions, feel free to ask. 

Emily Jones, Keller William Real Estate Agent.